Thoughts on Oregon solutions to global problems

April 08, 2012

Stop the "Education Urban Renewal Plan"

From the Oregonian article “Portland has $169 million downtown spending vision, but so far no plan and limited public input” by Brad Schmidt (here):

The Portland City Council is scheduled to consider a $169 million spending plan for downtown in one month but so far city leaders have provided the public with virtually no specifics about how the money will be used.

The City Council is scheduled to review the urban renewal plan on May 9 and vote May 16. But the proposal is currently unavailable, a spokesman for Portland's urban renewal agency said Wednesday, because officials are still "developing it."

One watchdog group says the city is moving too fast toward a vote.

The proposal is for an “Education Urban Renewal Plan” in areas around Portland State University. However, there are problems. It is a misnamed proposal. It is not urban renewal. It would fund neither high priority education projects nor high priority economic development projects. It would take taxes from relatively poor geographic districts and invest them in a relatively wealth district.

Here are more information (from the Report 11-92 on the Portland Development commission 4/11/12 agenda, here):

As proposed, this Education Urban Renewal Plan (the “Plan”) will direct tax increment resources to the 144-acre Education Urban Renewal Area (“EDURA”). The Plan sets forth long-term partnerships with PSU, Portland Public Schools (“PPS”), Multnomah County (the “County”), and the City of Portland (the “City”) with the broad objective of creating an environment of educational excellence, attracting private investment, enhancing blighted properties and developing the region’s workforce. The Plan is forecasted to provide up to $169 million for investment in research facilities, business accelerators, affordable housing, and private development.

This is a timely, unique opportunity for urban renewal to help grow a great urban university that will serve a great city. The implementation of the Plan is envisioned to bring regional benefit through continuum of educational advancement and job growth. Designed to be consistent with PDC’s mission and strategic plan, as well as PSU’s strategies for evolving into a world class university, these investments will provide a platform for job creation and private sector commerce through research and commercialization and other partnerships. Reduction of blight will also occur through both taxable and non-taxable development on low-density properties.

The objectives of this Plan will prioritize job growth and economic development projects through the following categories of investment:

• Strategic Partnerships that Develop and Educate a 21st Century Workforce and Enhance the Academic Environment;

• Urban Innovation;

• Research and Technology Commercialization;

• Entrepreneurship; and

• Cluster Industry Firms

These objectives will lead the progression of a district that will connect an educational environment and job generation to physical development as follows:

• Investing in the Lincoln High School site will provide an improved learning environment to aid the development of our future workforce.

• An enhanced academic environment at PSU provides the foundation for attracting new research dollars which also spurs greater entrepreneurship and small business development within the campus.

• Outward expansion evolves as entrepreneurs commercialize their ideas into startups and high-growth companies which attract additional cluster industries to gain a presence in private development within the URA.

Consistent with the City of Portland Housing Set Aside Policy, the EDURA Plan will provide tax increment resources for the Portland Housing Bureau to pursue investments in alignment with its mission and strategic goals.

(1) This is not urban renewal. The area covered by this urban renewal plan, quite a crazy gerrymandered map in itself, is not blighted, poor or underdeveloped. The plan will not take underdeveloped and undervalued properties and make them more productive and valuable. There is nothing to “renew.” Further, I doubt that public investments made under the plan would increase properties value any more than their natural growth. As such, tax increment resources would largely shift future investments from property taxes from other units of government and schools into this largely affluent and well-developed district.

(2) The Plan’s educational investments are not the highest priority or most cost effective. K-12 school districts across Oregon are cutting programs and teachers. Portland Public Schools, for example, is proposing to layoff 110 teachers, cut financial support for full-day kindergarten, and cut extra support for low socio-economic schools (cuts in federal Title I). Restoring these all cuts is a much higher priority than the Education Urban Renewal Plan. In general, the most cost-effective additional investments in education need to be made at the pre-school and kindergarten levels, not the university level. Rather than helping this reallocation, the Plan would shift funds from PPS to PSU. Allocating some funding to Lincoln High School does not help. It would only further distort the allocation of resources in PPS from poverty schools to wealthy schools and from lower grades to higher grades. And, before PPS invests further in any of its high schools, it needs to expand it online high school course offerings and offer a paid-for high school year abroad.

(3) The economic development components of the Plan do not address the most important educational investments needed for Portland’s economic future. With explosive economic growth abroad, Portland’s best growth opportunities are abroad. To tap into these growing foreign markets Portland needs to strengthen its foreign language programs from early childhood through the university level. This means expanding foreign language immersion programs, starting in kindergarten or earlier, in those languages strategic for our economic future, Utah, for example, is rapidly expanding immersion programs in Mandarin, Spanish, French, German, Japanese and Brazilian Portuguese. Oregon (Portland) should do something similar. It also means sending lots more students to study abroad. At the high school level, this could be done without any increase in costs. Existing study abroad organization offer high school years abroad (tuition, room and board with a family, and international transportation) for the same or less than it now costs to educate a student in district. Expanding immersion and study abroad programs are low cost shifts in educational spending. They need to be made before any larger, more expensive schemes, to strengthen programs at PSU.

I’ve a new placard: “Stop the 'Education Urban Renewal Plan.'” I’ll be out on the streets with it soon.

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To tackle California's mounting debts, Governor Jerry Brown came down with a heavy hand and eliminated Urban Renewal districts throughout the state. Following is an excerpt from a larger article:
In theory, RDAs spearhead blight removal. In fact, they divert billions of dollars from traditional services, such as schools, parks, and firefighting; use eminent domain to seize property for favored developers; and run up California’s debt to pay those developers to construct projects of dubious public value, such as stadiums and big-box stores. Most Californians have long been unaware that these agencies exist. As the activist group Municipal Officials for Redevelopment Reform puts it, RDAs constitute an “unknown government” that “consumes 12 percent of all property taxes statewide,” is “supported by a powerful Sacramento lobby,” and is “backed by an army of lawyers, consultants, bond brokers and land developers.”
(http://www.city-journal.org/2011/21_2_california-redevelopment-agencies.html)
PDC is facing dwindling revenue and needs this district to support the agency's revenue stream. Portland would do well to eliminate this bloated bureau and return the money to tax payers and let them rebuild Lincoln High School and award tax support to PSU.
PDC is a municipal leach.